We have no time to lose to stop the labor law deregulation that would be another labor “big-bang”

pril 13, 2013
INOUE Hisashi
Deputy Secretary General
National Confederation of Trade Unions (Zenroren)

1. We have no time to lose to stop the labor law deregulation that would be another labor “big-bang”

(1) Preparations are under way rapidly

The government led by Prime Minister ABE Shinzo is determined to win the House of Councilors elections slated for July, the aim being to give the green light to a consumption tax increase. That’s why he is intent on carrying out his “economic stimulus package”, which he believes can pull the country out of its decades-long deflation. As unions are demanding higher wages and better working conditions in the annual wage negotiations known as Shunto (Spring Struggle), the Prime Minister publicly requested the business leaders to increase employee remuneration. Meanwhile, some of the media are arguing that economic recovery can be possible if people get wage increase and are encouraged to spend more money and if the labor market is kept stable. This is what we haven’t seen before.

Nevertheless, the business sector is making a louder call for “deregulation” at the Council on Fiscal and Economic Policy, the Council for Industrial Competitiveness, and the Council on Regulatory Reforms, hoping to have the element adopted by the government’s basic policy for growth, which is to be completed in June. In order to turn Japan into a country that offers firms the easiest place in the world to do business, the financial circles are doing everything they can to get the Liberal Democratic-New Komeito coalition government to support the “deregulation” policy. A case in point occurred at a recent Japan-US summit meeting, in which Abe told US President Barack Obama that Japan would participate in the Trans-Pacific Partnership (TPP) negotiations. What’s happening is that the livelihoods of the Japanese working people are completely ignored as the government gives priority to serving the interest of Japanese and US multinational corporations, whose cross border business is growing throughout the world. This represents a brazen return to the “structural reform” policy based on neo-liberalism and a resurgence of big-bang policy that impacts the labor laws.

(2) How concrete policies are being considered in the regulatory reform council and other government panels

Concrete deregulation policies are being discussed mainly at the Council on Regulatory Reforms, which consists of four working groups to discuss (1) healthcare and medical services; (2) energy and environment; (3) employment; and (4) business startups. The working groups are to discuss the following eight topics, which would totally destroy jobs. It gives two key reform policies priority. One is the creation of a new type of regular full-time employment within limited framework. The other is a review of the fee-charging job placement business. These plans are to be finalized by the end of May so that it will be incorporated in the growth strategy to be launched in the near future. The government wants to use the reform of the “regular full-time employment” system as a breakthrough.

Working group on employment is discussing the following points:

1. Improving work environment
i) In order to increase labor force participation rates for women, senior persons, and young people, isn’t it necessary to establish a work-time regulation that takes into account work-life balance, by reviewing the present discretionary work schedule system, which is applied only to particular jobs for specific projects, and by reviewing the present flextime (flexible work schedule) system?

ii) Isn’t it necessary to enable people to work as full-time workers on condition that they work at a limited worksite or do a limited duty as part of an effort to provide workers with more opportunities to work with flexible work schedules?

2. Making rules for changing working conditions more rational
Isn’t it necessary to make the requirements for changing working conditions more rational and clearer so that the working conditions can better meet the needs of both the employers and the workers?

3. Review of the scope of “peripheral duties”
In order to ensure that workers can choose from diverse and flexible ways of working, isn’t it necessary to reclassify jobs into “26 professional jobs”, “peripheral jobs” and “liberalized use of temporary agency workers”?

4. Easing restrictions on the use of workers permanently employed by staffing agency
In order to ensure that workers can choose diverse and flexible ways of working, isn’t it appropriate that a limited term should not be imposed on workers employed permanently by staffing agencies?

5. Expansion of the use of temporary agency workers in areas related to medical services
In order to ensure that workers can choose from diverse and flexible ways of working, isn’t it necessary to allow temporary agency workers to be used for jobs related to medical services, other than doctors, through the prefectural council on medical services?

6. Dismissal regulations acceptable to both labor and management
Isn’t it necessary to establish clear rules of dismissals and, considering that relief of workers, whose dismissal was found invalid, can be diverse, and improve the work environment in which workers can perform their jobs under rules acceptable to both labor and management?

7. Reviewing the charged job placement business
(Explanation omitted)

8. Reviewing the system of employment of high school graduates
(Explanation omitted)

(3) Prime Minister urges the Ministry of Health, Labor and Welfare to make concrete measures in April 2 instruction

At the 6th meeting of the Headquarters for Economic Revitalization on April 2, the Prime Minister issued new instructions. Concerning the employment system, he instructed the Health, Labor and Welfare Minister to work in line with the following four policies. Thus, we have no time to lose in responding to the new attack.

<1> Smooth labor mobility from mature industries to growing industries without unemployment: Concrete plans should be made for a policy shift from one of making excessive efforts to maintain jobs to one of helping in labor mobility.

<2> Concrete plans should be made to make full use of job placement services in the private sector by making “Hello Work” (public job-placement agency) information available to the private sector so that the private sector can be entrusted with assistance in job finding.

<3> In order to enable people to choose from diverse ways of working, plans should be made to establish models for “diverse ways of working as full-time employee” employed for a particular workplace or work time, by reviewing the present way of choosing either a full-time regular position or a contingent position.

<4> In order to help increase birth rates in Japan and make it easier for women to develop their careers, concrete plans should be made to speed up the effort to take more effective programs to solve the problem of infants on the waiting lists for child care centers, by drawing on successful experiences of local governments that promoted expansion of child care programs in various forms, small and large, using various entities, including private sector businesses.

2. Extensive destruction of employment starting with reform of “regular employee system” as breakthrough

(1) It is designed to change the way the country functions in the best interest of large global firms

As stated earlier, what we are witnessing can be characterized as an all-out assault on workers through deregulation and labor market collapse, which may well be described as the recurrence of labor big-bang. In fact, an attempt is under way to fundamental change the way people are employed and work.

The review is fundamentally aimed at remaking Japan into a country that offers companies the best place in the world for them to operate, at uplifting the attractiveness of Japan as a country to make investments, and at attracting people, goods and money based on global business operations. Large-scale scrap-and-build projects are being planned. With the aim of encouraging fast growing businesses to increase its metabolism and under the name of revitalizing the local economy, efforts to remake Japan into a country with the local community likened to a “compact city” that only give priority to economic efficiency.

Abe’s labor big-bang scheme has the following features:

First, it aims to encourage the industries to increase labor mobility in response to their metabolism. This is why the financial circles are calling for giving employers freedom to dismiss workers (i.e., the introduction of a system of enabling employers to dismiss workers if they pay severance money) and for the introduction of a “limited regular full-time employee” system, which will hire workers on full-time positions in limited areas or limited job categories. They advocate “labor mobility without unemployment” but the labor market will certainly become more unstable and the advent of a period of massive unemployment is inevitable. A review of the job placement system will not only pave the way for its privatization but will serve as a system of labor mobility for the industry’s metabolism.

Secondly, it is to enable employers to use temporary agency workers without limits. Coupled with the “limited regular full-time employee” system, it will only help justify the use of “throw-away workers”, which makes it possible for employers to hire workers only when or where they need workers. It would establish employment rules that make the use of contingent workers commonplace. In other words, such a system will help to further reduce the total labor costs. It also takes into account the acceptance of foreign workers on a large scale in globalized business. It is the way to a society that makes the widening of income gaps and an increase in working poor commonplace. The issue of temporary agency workers is expected to be on the agenda in May.

Thirdly, it aims to gut the present work time regulations. This includes plans to revive the once rejected introduction of a white collar exemption system. Plans to ease the requirements for the use of the discretionary work schedule system or the flextime system are intended to make forced unpaid work commonplace and make workers work long hours while carrying out further job cuts. They talk about the need for “work-life balance” and for the improvement of the way people work in diverse ways and with flexibility. But these slogans are nothing but means of making the plans look nice. With job security being undermined, it’s easy to predict that limited regular full-time workers will be forced to shoulder excessively heavy workloads and that there will be more deaths from overwork (karoshi) than ever.

(2) Why reforming “regular full-time employee” system is used as threshold of the labor big-bang

The objectives of what the financial circles are promoting show why reforming the “regular full-time employee” system has been chosen as a priority to be used as threshold of the labor big-bang under the Abe administration.

At the first meeting of the working group on employment on March 28, its chairman TSURU Kotaro (professor at Keio University) said that the “price adjustment” for Japan’s lost two decades have too much depended on wage restraints or cuts and on the use of contingent workers. He then called for reforming the “regular full-time employee” system to give employment more flexibility by encouraging companies to make workers more mobile.

As part of concrete approaches to reforming the “regular full-time employee” system, the panel first took up the question “what should be rules of dismissals ?”. It calls for a variety of types of rules to be made concerning dismissal of workers, proposing three elements of regular full-time employees: (1) Regular employees whose future jobs, positions, and place of work are secured indefinitely and regular employees whose areas of work and jobs are limited by rules to be established; (2) Employment without terms set (with a tenure system and a trial period to be established by rules); and (3) Regulation of dismissals that allows employers to dismiss employees only when they have rational and logical reason to do so (by reviewing Article 16 of the Labor Contract Act and the four requirements for dismissals for the purpose of reorganization and establishing a system that makes it legal to fire employees if severance money is paid).

Clearly, the major purpose of reforming the “regular full-time employee” system is to give employers freedom to dismiss workers and increase “flexibility” of employment. At the same time, the panel proposes measures, including generalization of trial employment, to create a category of regular employees whose wages and other treatment are inferior to permanent regular employees. In sum, these measures constitute an across the board adverse reform to make contingent/precarious employment common place, the aim being to use them as the mainstay of future price adjustment. There is nothing to help improve the treatment of casual workers in these plans. Degradation of the treatment of full-time regular workers is what the reform is all about.

Note that reform in the “regular full-time employee” system is being proposed ostensibly to help create a employee-friendly work environment or help offer people diverse and flexible way of working. It is intended to force through these adverse labor reforms by fueling division and rifts using the gaps between regular full-time workers and contingent workers, bad working conditions for women, and workers’ discontent. For this reason, it is necessary not only to expose and criticize what the financial circles are trying to achieve but also to expose the bad conditions of contingent workers, young workers and women workers based on the principle of equal opportunity and to demand their improvement.